I agree with the conclusion that the City’s earnings tax, a one percent local tax levied on those who live or work in the City, is a disincentive to some residents and businesses.
I favor eliminating it. Frankly, almost everyone does.
St. Louis collects the earnings tax to recognize two important realities:
(1) a City with a small area, without the current ability to annex its neighbors, cannot pay for its public safety costs and infrastructure by relying on property and sales taxes; and
(2) the historic segregation of the poor, young, and old in the City places extraordinary responsibilities and burdens on the government.
Expand the City limits and tax base to say 270, and the need for the earnings tax would disappear. Conversely, spread the costs of social services evenly throughout the region, and the need of the earnings tax would disappear.
Barring these commonsense, but unlikely, events, I am working with other City officials to re-examine every current and potential source of revenue. Our first commitment is to maintain or improve City services by continuing our unprecedented renaissance.
At this point, I can’t tell you that the earnings tax will or will not survive our scrutiny.